Romano’s History

2. Romano’s History • Romano Pastega immigrated to the United States from Italy in 1907. • His son Mario Pastega purchased the Pepsi-Cola Bottling Company in Klamath Falls first. • In 1961 Corvallis, Oregon. • In 1974 Tillamook, OR, • In 1986 Medford, OR,

3. Romano’s History • Ken Pastega, one of Mario’s three son created the Romano's Italian Soda line. • "I kept seeing people in coffee shops and restaurants order Italian sodas, only to receive a drink that lacked sophistication”

4. Romano's History • After seeing the popularity of Italian soda increase in recent years, Pastega was convinced that people would buy these delicious drinks if available. • In 2005 Romano's was spun off from the Pastega Beverages and is run as its own company.

5. Romano's History • Romano’s is dedicated to recreating delicious Italian sodas so everyone can enjoy them. • Romano’s Italian sodas are available in plastic bottles and at the soda fountains in convenience stores, restaurants and cafes.

6. Target Market • Romano’s current primary target market • Young adults, ages 18-25 • Active, busy, and energetic lifestyle • Students and young professionals who are social and ambitious • Health conscious but still enjoy good food and drink • Secondary target market • High school students • Mothers looking for a good tasting diet soda • Heavy soda drinkers • Parents that are attracted to a healthier beverage option for their families

7. Target Market - Recommendations • Don’t focus so much on the secondary target market • Instead, add a new primary target market based on an older aged segment of the market. • The diet Italian soda would work well for this new segment • Target to people who may have health issues that restrict them from consuming sugar • Product provides a healthier alternative

8. The New Target Market • Middle age adults ages 45-55 years old • Health conscious for themselves and their family • Active and energetic • Enjoys socializing with family and long time friends • Developed loyalty brands, but are curious to try new things • Are educated on the latest products in the market

9. “Savvy Sipper” “Classy Connoisseur” • Younger target market • Age represents about 13,000 people in Benton County • Figure to get 20% response to buy • Total = 13,000 x 20% 2,600 • Older target market • Age represent a little more than 11,000 people in Benton County • Figure to get 10% response to buy • Total = 11,000 • x 10% • 1,100 *population stats based off of the 2000 U.S. Census Bureau

10. Target Market - Projections • Creating a new target market will increase our customers • Provide more sales which will in the long term add to the growth of the company • Create great word-of-mouth advertising with an increase in customers drinking Romano’s soda • Enhance the image of Romano’s as being a healthier alternative to big brand named sodas

11. Product Flavors Offered • Orange Cream (available in Diet) • Creamy Strawberry (available in Diet) • Sour Apple • Vanilla Bean • Berry Pomegranate Newest Flavor • Blackberry – coming in March

12. Product - Recomendations • Maintain Romano’s healthy-image • Stay with non-caffeinated beverages • Push healthier image by simplifying flavors • Flavor Trends • Keep up to date with health-research on the healthiest ways to sweeten products. • They currently have a link on their page to “Why cane sugar is better” • Look into healthier sugar substitutes like Stevia

13. Product - Recomendations • To attract attention of Innovators or Early Adopters • Consider offering unique, eye catching products that have the potential to be the next big thing • Examples: “Key-Lime Pie” or “Vanilla-Pear” etc.

14. Price Sell Product at $1.25 • This price-point is very competitive • Affordable as well • Compares to prices of competition • Other soda companies (Coca-Cola, Pepsi, etc.) • Gatorade • Sobe (Romano’s Italian Sodas is actually cheaper) • Greater volume than Romano’s product • Prevents a “cheap” image – brand equity • Not too expensive, should not push customers away • Gives an equal if not better quality image when compared to competition

15. Price Breakdown Romano's Price Per Bottle Retail Price $1.25 Romano's Wholesale Price -0.85 Vendor Profit $0.40 Romano's Wholesale Price 0.85 Romano's Production Cost -0.40 Romano's Profit Margin $0.45

16. Estimated Profit Northwest: Oregon, Washington, Idaho Using information from the 2006 AFS: Total Population = 399,423 Assuming 2 purchases a week or 104 purchases a year Savvy Sippers: TP x .20 =220,795 Classy Connoisseurs: TP x .10 = 173,628 Segments Combined = 394,423 394,423 x $0.45 (profit/bottle) * 104 (purchases/year) Total Profit/Year = $19,168,957.80 Market share expected to grow!!!

17. Price Appeal To ensure the success of the Italian Soda we will: • Keep a consistent price • Reduce price barrier • Current price/volume slightly higher than a Coca-Cola, however evokes quality perception • Select Coupons • In store coupons at select locations such as Roth’s Supermarkets • Offer a 2-for-1 promotion • Back of label coupons • Reduces paper usage, adds purchase value

18. Promotion - Recommendation • Stronger promotional front • Expansion into the local community- Product Placement • Community activities • Da Vinci Day, Fourth of July, Fall Festival, Saturday Market • Oregon State University • Sporting events • Greek Life Events • Campus functions

19. Promotion - Recommendation • Sponsorship • Local schools, fundraisers, PTA meetings, Bingo Nights • Boys & Girls Clubs- teams, events • Intramural Sports through Oregon State University • Teams, jerseys, gatherings, and celebrations • Campus events • Hang banners, host a concert, provide sustenance in a beverage garden

20. Promotion - Recommendation • Expand advertisements • Already tapped into radio air time • Look locally: • Dixon screen advertisements • Reader boards • Inserts in the Daily Barometer • KBVR Television and radio

21. Promotion - Recommendation • Provide entertainment/deals with the drink • Lid entertainment • Like Sobe or Snapple, place sayings under the lid • Teach consumers Italian sayings • Like Coke or Pepsi, relate the use of lid sayings or promotions to a website that is interactive, so the consumers is excited to drink more • Coupons • Under the label, place a coupon that will benefit the consumer on their next Romano’s purchase

22. Promotion - Recommendation • Budgeting • Expanding promotion will require a larger budget • Such promotional tools like newspaper inserts and coupons will be more costly • 8,000 minimum inserts at $70 per 1000 =$560 • Sponsorships also require funding • The more teams, events, activities sponsored, the more financial support needed • The bigger the idea, the more money needed • Promotion will have to be implemented over time as revenue increases

23. Distribution • Romano's Italian Soda is available in fountain, bottled beverage, vending and granita machines.

24. Distribution - Markets • Throughout Oregon • Over 200 different locations around Portland • Over 50 location around Salem • Washington and Idaho • Battleground • Vancouver • Longview • Indiana • Warsaw

25. Distribution - Intermediaries • Many small “Ma and Pa” stores • Roths & Thriftway • Local delis and markets • Gas stations Ex. 7-Eleven • Liquor stores

26. Distribution channel • Very simple and clean • From bottling plant in Eugene to distribution centers • 13 distribution centers total in Oregon, Idaho and Washington • From Distribution centers to stores • From Stores to Consumer Manufacturer Distribution Center Stores Consumer

27. Distribution Relationship • Romano’s strives to have a strong relationship with each of its intermediaries. • Offers buy backs to items that are damaged or do not sell. • Reimburse dissatisfied customers. • Offers in store promotions to selected stores • Free samples • Coupons

28. Distribution - Recommendations • Increase efficiency through technology • Focus growth in markets that are farther away • Increase business to business connections

29. Positioning • Romano’s is a very young company • Build reputation and strong brand awareness

30. Positioning • As the company grows, look into the option of greatest benefit • Expanding the company • Consolidating • Sell to the highest bidder • Once Romano’s has saturated the market, their next step could be selling to a larger company.

31. Positioning • Current connections with Pepsi • Production/bottling plants • Potential buyer when the time is right • Maybe a smaller company like Cadbury-Schweppes would be interested in this unique product, and be more attractive to Romano’s family values.

32. Positioning • The goal is to make the most sensible decision • Things to consider: • Family owned and operated company, does selling the company hurt the brand image and equity? • Competition in drink market is intense, will the product survive? • Is there a place for this product among the soda giants?

33. Positioning • When the time is right, Romano’s will decide if selling the company is a smart choice • They are still in their early years and it is too soon to tell if their products are going to make it • The uniqueness of their sodas offer something new to the drink market, and the soda giants are always looking for the next big item.

34. Projected Timeline

35. Conclusion • Romano’s is young and strong company with lots of room for growth • The market for bottled Italian sodas is virtually untapped and will be interesting to watch grow and develop • With our recommendations the company will be able to increase their market share and brand equity

36. Any Questions?